Big payouts on the line

Tranz Rail senior executives can trigger big payouts if control of the company changes.

Managing director Michael Beard is entitled to receive 24 months' base salary and benefits, plus a base salary payment until March 2004, a pro-rata share of a performance incentive plan, payment of life insurance premiums until March 2004 and outplacement assistance.

Beard was paid $1.1 million last year, including the value of restricted shares, according to the annual report. Tranz Rail had 10 executives earning more than $280,000 last year.

The contracts of six of the 11 managers in the executive management group have similar entitlements to Beard, whereby either they or the company can trigger the entitlements if control of the company changes.

All but one of the six are entitled to 18 months' base pay and a pro-rata payment of incentive plans.

Grant Samuel said executive options plans were out of the money, as were redeemable restricted shares issued to present and former staff.